Google+
Close

The Corner

The one and only.

Further Confusion in Defense of Obamacare



Text  



Over at Slate, Simon Lazarus has a very strange piece about the Ryan budget. His basic premise is that the Republican budget, just like Obamacare, requires Americans to purchase private health insurance. How? He offers two ways. First, he writes:
One of these Ryan budget proposals—as yet little noticed by pundits or politicians—is almost an exact copy of its equivalent in the Affordable Care Act. It would repeal the current exclusion from employees’ income of employer contributions to their health insurance premiums, thus terminating the subsidized employer-sponsored group health regime that covers nearly 60 percent of all Americans. In its place, the Republican plan would substitute a refundable tax credit, to be provided to individuals who purchase health insurance (or to employers who purchase health insurance for their employees). When this new arrangement takes effect in 2022, the tax credit would be set at $2,300 per adult and $1,700 per child, not to exceed $5,700 per family.
Well, first of all, this is just flat-out false. There is simply nothing of the sort in the Ryan budget. Other Republican health-care proposals (including the Roadmap that Paul Ryan published on his own last year and one of the bills offered up as an alternative to Obamacare) have included various versions of replacing the tax exclusion for employer-provided coverage with a credit or deduction, and John McCain made a similar proposal in the 2008 campaign. But the budget the Republicans passed last month didn’t. (This morning, Lazarus’s piece was updated to refer instead to Ryan’s Roadmap proposal, with a little note saying that the Roadmap is just a more detailed version of the Republican budget. But that’s not true either. The Roadmap had this provision, and the budget doesn’t. It’s not a matter of detail.) It’s too bad such a provision wasn’t in the budget, it’s a good idea that they should have included. Why does Lazarus think this kind of proposal, if it had been included, would have been tantamount to an individual mandate? He writes:
Like this Ryancare tax incentive, the “individual mandate” section of the ACA, which the White House calls the “individual responsibility” provision, constitutes a pay-or-play option. Beginning Jan. 1, 2014, when the ACA provision takes effect, individuals who do not qualify for exemption on hardship or other specified grounds, must either carry health insurance or pay a tax penalty as part of their annual income tax filing. The ACA caps individuals’ penalty liability at 2.5 percent of household income above the filing threshold, or a flat dollar amount ranging from $695 to $2,085, depending on family size.
 
Under both provisions, the result is the same: People who choose to carry health insurance have a lower tax bill than they would if they chose not to. In terms of their respective potential impact on individuals’ bank accounts and tax liability, the manner in which they affect individuals’ financial incentives, and hence the constraining effect on individuals’ financial choices to either buy or forgo health insurance, the two “mandate” provisions are identical. (Indeed, in most cases, the financial difference for the individual taxpayer made by the Republican tax credit would be greater—i.e., more “coercive”—than the ACA tax penalty.)
In other words, Lazarus argues that a tax credit that could be used toward the purchase of health insurance (even a refundable credit that would provide money for health coverage for people who don’t pay taxes) is the same thing as a penalty for failing to purchase health insurance. This is an even more contorted argument than the one now being made in federal court in defense of the individual mandate (that the mandate is just a tax). But Lazarus doesn’t really make an argument for this position, he just attributes to the Ryan budget a provision it does not contain and then asserts that it’s just like the individual mandate. 
 
He then proceeds to another non sequitur, this time with regard to the Medicare reform that actually is in the Ryan budget:
In addition to cloning the ACA’s framework for coverage of adults under 65, the Ryan budget would also apply a similar approach to Americans currently covered by Medicare. Beginning in 2021, former Medicare-eligibles would receive a voucher they can apply to the purchase of private insurance. According to the Congressional Budget Office, the vouchers would be worth approximately $6,000 for recipients age 65, and would be greater for older recipients, averaging $11,000 across the entire Medicare population. Of course, Americans would be required to continue to pay their annual Medicare tax throughout their working lives. Hence, the Republicans’ proposal to replace Medicare with partially subsidized private insurance also operates to “compel” people to pay for private health insurance policies. Moreover, this mandate is not even a pay-or-play option; Medicare taxes are mandatory, whether workers want to buy eligibility for old-age vouchers or not.
Right. It’s not a pay-or-play option. It’s a government program that uses a tax levied on everyone to provide a benefit to a group deemed eligible. It’s therefore not analogous to the individual mandate, which instead uses a penalty to seek to coerce individual behavior.
Lazarus sums up these feats of misinformation and illogic to conclude that “if the ACA mandates are unconstitutional, the Ryancare mandates must be as well.”
 
QED.


Text  


Subscribe to National Review

Sign up for free NRO e-mails today: